Mega Edition: Jes Staley Looks To Wiggle Free Of The Epstein Survivor Lawsuit (7/20/26)

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What's up everyone, and welcome back to the Epstein Chronicles.
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In this episode, we're going to begin taking a look
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at Jess Staley's third party defendant memorandum of law and
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support of motion to dismiss. And this was all part
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of the USVII versus JP Morgan lawsuit that has bled
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over into their lawsuit against the survivors. So it's very
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important to understand all of this. I know there's a
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lot and some of it is a slog, there's no doubt,
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but if you want the real story, this is the
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way to get it. Save the Epstein file bullshit for
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people who don't know what they're talking about, for people
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who don't even understand the story. For the rest of us, well,
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the battle continues. Preliminary statement in November twenty twenty two,
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plaintiff Jane Doe to JP Morgan Chase Bank. Her complaint
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asserts that JP Morgan ignored Jeffrey Epstein's sex trafficking crimes
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to retain them as a lucrative banking client, which in
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turn enabled Epstein to victimize Doe and others. The government
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of the US US Virgin Islands filed its own suit,
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alleging that JP Morgan enabled Epstein to operate his enterprise
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out of its territory. Confronted with the documented failures in
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its anti money laundering compliance along with the history of
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such failures and other matters, JP Morgan sought to change
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the narrative and deflect blame by pulling Jess Staley, one
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of its former employees, into the two cases. Via two
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third party complaints. The bank claims its fifteen year long
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relationship with Epstein was in fact all mister Staley's fault,
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and that he must pay the plaintiff's damages. JP Morgan
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further seeks to claw back years of compensation from mister
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Staley plus damages for harm to its already solied reputation.
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But JP Morgan has failed to state any viable claim
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against mister Staley. Indeed, the third party complaints, while creating
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provocative media fodder, never explain how an employee who is
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not alleged to have had decision making authority over Epstein's accounts,
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and who is not alleged to have seen any of
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the suspicious account activity that other JP Morgan pla is
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ignored cause the plaintiff's alleged injuries. Each of JP Morgan's
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four claims is legally deficient. Neither the identification claim Count
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one nor a contribution claim Count two is actionable. First,
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the identification and contribution claims fail because the bank engages
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in defective shotgun pleading that improperly tries to combine multiple claims,
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all lacking into two cursory counts. Second, the identification and
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contribution claim fail to the extent that they are based
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on the plaintiff's claims under the Trafficking Victims Protection Act TVPA,
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because that statute does not permit contribution or identification. Third,
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the identification claim fails because JP Morgan does not and
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cannot plausibly allege that its liability is solely attributable to
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mister Staley's conduct. Fourth, JP Morgan's contractual identification of mister
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Staley as one of its officers bars the bank's identification
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claim against them under black letter New York law if
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JP Morgan fails to identify any distinct injury for which
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it seeks contribution. The two additional claims alleging that mister
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Staley breached his fiduciary duty to the bank during his
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employment and violated the faithless servant doctrine employment claims that
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counts three to four also fell as a matter of law,
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they do not meet the requirements for impleting under Rule fourteen,
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and for various reasons, they are deficient on the merits.
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Whether or not JP Morgan is liable to DOE and
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the USVII remains to be seen. What is certain is
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that the bank cannot treat mister Staley and its public
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relations shield by asserting claims that lack any legal or
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factual basis background. Third party defendant James Edward Jess Staley
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is former JP Morgan executive. He began his career at
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the company in nineteen seventy nine and rose up the
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ranks to the highest levels of management see JP Morgan's
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third Party Complaint sixteen. From two thousand and one to
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two thousand and nine, mister Staley was as the chief
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executive officer of the bank's Asset Management Group. Starting in
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two thousand and nine, mister Staley moved to the Corporate
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and Investment Banking division, where he served as its chief
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executive officer and reported to Jamie Diamond, the bank's president
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and chairman. Per its by laws, JP Morgan agreed to
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identify corporate officers such as Staley to the fullest extent
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permitted by applicable law. Mister Staley left JP Morgan in
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January of twenty thirteen, eventually joining its competitor Barclays as
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chief executive officer. Upon departing JP Morgan, mister Staley allegedly
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signed an agreement and release in which he agreed to
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be bound by JP Morgan's code of conduct even after
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he left employment at the bank. Since November of twenty
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twenty two, JP Morgan has been embroiled in lawsuits relating
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to the bank's alleged involvement with Jeffrey Epstein and his
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sex trafficking enterprise. These suits began when plaintiff Jane Doe
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sued the bank on November twenty fourth, twenty twenty two,
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with the US Virgin Islands filing a simil he complaint
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about a month later. Those allegations. Those class action complaint
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alleges at JP Morgan supplied the financial lifeblood of Epstein's
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sex trafficking enterprise by providing him and his associates banking
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services and access to exorbit amounts of cash from nineteen
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ninety eight through August of twenty thirteen, first amended Complaint
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twenty two CV DASH one zero zero one nine. Doe
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claims that JP Morgan provided these services even though it
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knew that Epstein was engaged in sex trafficking. While though
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alleges at JP Morgan's knowledge stemmed in part from what
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mister Staley observed, she alleges a plethora of other ways
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that JP Morgan knew of Epstein's misconduct, completely independent of
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mister Staley's observations. One Epstein's widely reported arrest in two
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thousand and six that resulted in his incarceration and registering
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as a sex offender. Two Epstein's involvement in civil lawsuits
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which resulted in payments that were sent from JP morgan
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bank accounts. Three Epstein's suspicious transaction history that included large
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cash withdrawals, wires to women with Eastern European surnames, and
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payments to own conspirators. Doe claims that she was trafficked
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by Epstein and unnamed associates. Doe also alleges at JP
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Morgan started banking regulations to conceal its involvement with the
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trafficking enterprise. The bank, for example, neglected the file suspicious
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activity reports required by anti money laundering laws, and failed
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to adequately conduct know your Customer due diligence dough alleges
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that had the bank followed these standard practices, Epstein's conduct
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would not have flown under the radar. For years, awareness
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of Epstein's criminal conduct reached the bank's highest levels, including
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CEO Jamie Diamond and the CEO of Private Banking, Mary Erdos,
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who nevertheless advocated to keep Epstein as a client. JP
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Morgan continued to serve Epstein for the financial benefits to
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the bank, such as access to his networks of wealthy
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potential customers. Notably, zero alleges that JP Morgan's misconduct extended
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beyond twenty thirteen when Staley left the bank. In particular,
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JP Morgan refused to file stars and continue to recommend
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Epstein as a client to others. Four of those claims
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survive JP Morgan's motion to dismiss. One negligently failing to
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prevent physical harm, two negligently failing to exercise reasonable care
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as a banking institution providing non routine banking. Three knowingly
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benefiting from participating in a sex trafficking venture in violation
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of US Code eighteen, Section fifteen ninety one A and
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two and four obstructing enforcement of the TVPA in violation
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of US Code eighteen, Section fifteen ninety one D. Order
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on motion to dismiss twenty two CV Dash one zero
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zero one nine ECF Number sixty six. The USVII Allegations
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USVII complaint makes similar allegations. It claims that JP Morgan
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provided financial services in cash to Epstein even though the
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bank knew of his sex trafficking through various means, including
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one Epstein suspicious transactions such as wires to victims, withdrawals
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of large sums of cash, and payments to own recruiters
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see USVII first amended complaint and two public reports of
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Epstein's arrest and misconduct. USVII alleges that internal messages at
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the bank show that JP Morgan employees were aware of
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these facts, and that this knowledge reached the highest levels
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of the bank, including CEO Jamie Diamond, and JP Morgan's
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failure to follow required banking practices permitted the sex trafficking
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conspiracy to operate. Following the court's order on JP Morgan's
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motion to dismiss, the only remaining claim brought by the
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USVII arises under the TVPA order on motion to dismiss
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twenty two DASH CV Dashed one zero nine zero four
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ECF Number ninety. JP Morgan's third party complaints. JP Morgan
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filed a third party complaint in each case. Both complaints
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plead identical claims for common law identification, contribution, breach of
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fiduciary duty, and breach of the faithless servant doctrine. JP
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Morgan first brings omnibus claims for contribution and identification that
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seek to hold mister Staley liable for all the claims
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that Doe in the USVII bring against JP Morgan, lumping
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together does common law and federal statutory claims. JP Morgan alleges,
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despite contry assertions in the plaintiff's complaints, that the plaintiff
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seeks to hold the bank liable based on substantial part
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on the acts or omissions of Staley TPC forty six. Thus,
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it alleges, if JP Morgan is held liable, then mister
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Staley must pay the bank for all damages awarded to
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the plaintiffs by means of identification and or contribution. JP
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Morgan's claims for breach of fiduciary duty and breach of
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the faithless servant doctrine, rely on the duties he owed
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the bank as an employee and his alleged agreement to
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abide by the bank's Code of conduct, which he purportedly
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said signed each year between two thousand and six and
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twenty twelve. JP Morgan alleges that mister Staley breached his
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duties by acting against the interests of the bank, failing
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to report or fraudently concealing information about Epstein, affirmatively misrepresenting
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facts about his personal interactions with Epstein, and repeatedly providing
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misleading information to JPMC when vouching for Epstein's character and conduct.
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As for the breach of fiduciary duty claim, JP Morgan
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seeks damages related to one the cost of defending and
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adverse publicity from these lawsuits, and two any amounts and
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damages at JP Morgan might have to pay out to
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the plaintiffs ID. Sixty four and sixty five. For the
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faithless servant claim, JP Morgan seeks disgorgement of mister Staley's
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compensation from the Amorphis period of his disloyalty. The bank
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also seeks punitive damages. All right, we're going to wrap
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up this episode right here, and in the next episode
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we're going to pick up with legal standard. All of
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the informationation that goes with this episode can be found
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in the description box. What's up everyone, and welcome back
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to the Epstein Chronicles. In this episode, we're picking up
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where we left off with the just Daily motion to
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dismiss the legal standard. Under Federal Rule of Civil Procedure
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twelve B six, a complaint must contain sufficient factual matter
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accept it is true to state a claim to relief
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that is plausible on its face Ashcroft versus zick Ball,
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five point fifty six US six sixty two six seventy eight,
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two thousand and nine. A claim has facile plausibility when
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the plaintiff pleads factual content that allows the court to
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draw the reasonable inference that the defendant is liable for
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the misconduct alleged. While the court must draw all reasonable
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inferences in the complaints favor, it need not accept as
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true mere conclusions of law or unwarranted deductions of fact.
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Petro Assurance Incorporated versus National Association of Insurance Commissars eight
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eighty eight f. Dot su upp. Two D four ninety
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one five O two SDN y twenty twelve. Claims that
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sound and fraud are subject to the heightened pleading standards
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of Rule nine B. Cohen versus Sac Trading Corporation, seven
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eleven f Dot three D three fifty five three fifty nine,
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Second Circuit twenty thirteen. Such allegations must be stated with particularity,
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meaning that they must specify the time, place, speaker, and
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content of any alleged misrepresentations, explain how the misrepresentations were fraudulent,
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and plead those events which give rise to a strong
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inference that the defendant had an intended to fraud, knowledge
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of the falsity, or a reckless disregard for the truth.
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In other words, a plaintiff must set forth the who, what, when, where,
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and how of alleged fraudulent conduct. United States versus Kester
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versus Novardes Pharmaceutical Corporation, twenty three f Dot supp. Three
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D two forty two two fifty two SDN Y two
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five fourteen. Rule nine B applies to fiduciary duty claims
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that sound in fraud. Babbitt versus Copal Nissan Incorporated. Twenty
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twenty WL thirty one eighty three eight nine five at five,
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Eastern District of New York, June fifteenth, twenty twenty one.
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The identity in contribution claims Counts one and two fail
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as a matter of law. JP Morgan's Shotgun pleading warrants
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dismissal of counts one and two as an initial matter.
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The claims for identification and contribution are procedurally improper because
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they violate rules eight and ten B by lumping together
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all the plaintiffs outstanding claims under singular causes of action
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for contribution and common law identification. For each of these claims,
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JP Morgan seeks relief under two distinct bodies of law,
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federal law for the plaintiffs TVPA claims and state law
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for Doze common law claims, even though these claims require
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distinct analysis. See Don King Productions Versus King Vision vers.
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Ferrara nine Dot supp. Two eighty six, two eighty eight
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and eighty nine Eastern District of California of nineteen ninety six,
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noting that the right to identity for claim arising under
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federal law must be treated separately from right relating to
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state law claim Zeno. Davidoff Sa Verse selective Distribution, International, Incorporated.
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Twenty thirteen, w L one two four five nine seven
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four at four SDNY, March eight, twenty thirteen. Whether a
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defendant who incurs liability under a federal statute may pursue
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either contribution or identification is a question of federal law.
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The haphazard style of pleading is flatly forbidden by the spirit,
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if not the letter, of Rules eight A and two
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and ten B, because, among other vices, it confuses the parties, courts,
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and factfinders and hinders cojin analysis of each claim independently.
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Barmapav Versus aMule nine eighty six f Dot three D
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thirteen twenty one, thirteen twenty four eleven Circuit twenty two,
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twenty one CC Versus Anucci, twenty twenty two, w L
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one eighteen thirty two seventy four at two, Northern District
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00:15:08.320 --> 00:15:11.679
of New York, April twenty first, twenty twenty two, identifying
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failure to separate into a different count each cause of
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00:15:14.720 --> 00:15:18.480
action or claim for relief as shot completing, and the
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00:15:18.480 --> 00:15:22.080
Court should dismiss the identification and contribution claims for this
243
00:15:22.200 --> 00:15:26.120
reason alone. B There is no right to identity or
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00:15:26.159 --> 00:15:31.200
a contribution under the TVPA. JP Morgan's identification in contribution
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00:15:31.320 --> 00:15:34.159
claims also fail to the extent that they seek to
246
00:15:34.159 --> 00:15:38.799
offload liability for the plaintiffs TVPA damages because the TVPA
247
00:15:38.919 --> 00:15:43.600
does not permit claims for identification or contribution against third parties.
248
00:15:44.120 --> 00:15:47.360
When an underlying claim arises under federal law, there is
249
00:15:47.399 --> 00:15:51.960
no claim for contribution or identification unless the operative federal
250
00:15:52.000 --> 00:15:57.159
statute provides one. Bernard Made Off Securities LLC seven to
251
00:15:57.200 --> 00:16:01.279
twenty one F dot three four fifty four sixty five,
252
00:16:01.320 --> 00:16:07.320
Second Circuit twenty thirteen. See Herman versus RSR Security Services Ltd.
253
00:16:07.519 --> 00:16:10.080
One seventy two F dot three D one thirty two
254
00:16:10.480 --> 00:16:14.759
one forty four, Second Circuit nineteen ninety nine, affirming dismissal
255
00:16:14.799 --> 00:16:18.279
of New York State law claims for contribution and identification
256
00:16:18.360 --> 00:16:22.279
for liability under Fair Labour Standards Act. Such claims are
257
00:16:22.279 --> 00:16:25.559
available only through one the affirmative creation of a right
258
00:16:25.600 --> 00:16:29.000
of action by Congress, either expressly or by clear implication,
259
00:16:29.480 --> 00:16:32.120
or two the power of federal courts to fashion of
260
00:16:32.200 --> 00:16:38.000
federal common law of contribution or identification. Texas Industries Incorporated
261
00:16:38.080 --> 00:16:42.720
Versus Radcliffe Materials Incorporated. Four fifty one US six thirty
262
00:16:42.759 --> 00:16:46.200
six thirty eight, nineteen eighty one. Yet, courts have been
263
00:16:46.279 --> 00:16:50.639
particularly reluctant to recognize the right of contribution or identification
264
00:16:51.000 --> 00:16:53.720
as a matter of either federal common law or of
265
00:16:53.759 --> 00:16:57.120
a statute. Anderson versus Griffin, three ninety seven f. Dot
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00:16:57.200 --> 00:17:00.519
three D. Five point fifteen five twenty three seven Circuit
267
00:17:00.720 --> 00:17:04.720
twenty twenty five. If the TVPA does not mention contribution
268
00:17:05.000 --> 00:17:08.960
or identification. To determine whether a statute nonetheless contains an
269
00:17:09.000 --> 00:17:12.160
implied right, courts have traditionally looked to the language of
270
00:17:12.240 --> 00:17:16.440
the statute itself, its legislative history, the underlying purpose and
271
00:17:16.480 --> 00:17:20.039
structure of the statutory scheme, and the likelihood that Congress
272
00:17:20.039 --> 00:17:25.039
intended to supersede or to supplement existing statute remedies. Northwest
273
00:17:25.079 --> 00:17:29.359
Airlines Incorporated versus Transportation Workers Union of America four fifty
274
00:17:29.359 --> 00:17:33.519
one US seventy seven ninety one, nineteen eighty one. While
275
00:17:33.559 --> 00:17:37.440
the sole consideration is congress apparent intent, in recent decades,
276
00:17:37.480 --> 00:17:40.519
the Supreme Court has signaled that court should adopt a
277
00:17:40.559 --> 00:17:43.880
far more cautious course before finding implied causes of action.
278
00:17:44.359 --> 00:17:47.640
See Ziggler versus A. Bossy, five eighty two US one
279
00:17:47.720 --> 00:17:52.559
twenty one thirty two twenty seventeen. First is mentioned, the
280
00:17:52.599 --> 00:17:56.160
TVPA provisions invoked by the plaintiffs are completely silent on
281
00:17:56.200 --> 00:18:01.319
the issue. See generally US Code eighteen, section fifteen ninety one.
282
00:18:01.359 --> 00:18:04.400
The omission is significant, and given that Congress certainly knows
283
00:18:04.559 --> 00:18:09.200
how unambiguously create such rights see Northwest Airlines four fifty
284
00:18:09.240 --> 00:18:12.119
one US at ninety one and ninety two d N
285
00:18:12.240 --> 00:18:15.960
twenty four, contrasting Section eleven of the Securities Act of
286
00:18:16.000 --> 00:18:20.160
nineteen thirty three, where Congress did though Texas Industrial four
287
00:18:20.160 --> 00:18:23.880
to fifty one US at six forty and DOT eleven same.
288
00:18:24.599 --> 00:18:27.720
And this silence rings loudly given that Congress has routinely
289
00:18:27.720 --> 00:18:31.400
amended the TVPA since its enactment in two thousand and
290
00:18:31.519 --> 00:18:35.039
yet has never included such rights. Simply put, if Congress
291
00:18:35.039 --> 00:18:38.799
had wanted to include identification and contribution, it would have
292
00:18:39.640 --> 00:18:44.240
second causes of action for contribution or identification would cut
293
00:18:44.279 --> 00:18:49.000
against the tvpa's mission to protect trafficking victims. Noble versus Weinstein,
294
00:18:49.039 --> 00:18:52.519
three thirty five f. Dot supp three D five oh
295
00:18:52.559 --> 00:18:57.279
four five point fifteen SDNY twenty eighteen, explaining that civil
296
00:18:57.319 --> 00:19:01.640
remedies portion of TVPA services the remedial purpose of enhancing
297
00:19:01.720 --> 00:19:07.039
protections of trafficking victims, quoting Trafficking Victims Protection Reauthorization Act
298
00:19:07.039 --> 00:19:10.240
of two thousand and three one seventeen Statute twenty eight
299
00:19:10.319 --> 00:19:14.680
seventy eight, Section four, effective December nineteenth, two thousand and three,
300
00:19:15.480 --> 00:19:18.759
as evident in this litigation, such claims serve only to
301
00:19:18.880 --> 00:19:22.799
complicate and add expense to victims suits. See Little versus
302
00:19:22.799 --> 00:19:27.359
Arabank PLC. Six eleven F. Dot supp two d. Two
303
00:19:27.359 --> 00:19:30.240
thirty three, two forty one Eastern District, New York, two
304
00:19:30.240 --> 00:19:33.640
thousand and nine. Finding the right of contribution under Anti
305
00:19:33.759 --> 00:19:36.799
Terrorism Act would not further the goal of compensating victims
306
00:19:36.839 --> 00:19:40.920
of terrorism because it would add expenses to the litigation. Anderson, three,
307
00:19:41.039 --> 00:19:44.039
ninety seven f. Dot three d at five twenty three.
308
00:19:44.119 --> 00:19:46.440
All that or right of contribution does is add to
309
00:19:46.519 --> 00:19:48.839
the cost of litigation, and so unless there is a
310
00:19:48.880 --> 00:19:53.119
compelling reason to suppose that the legislature would want such
311
00:19:53.119 --> 00:19:55.519
a right to be enforced, it will not be. And
312
00:19:55.599 --> 00:19:58.079
to the extent that the statute is intended to deter
313
00:19:58.519 --> 00:20:02.720
would be traffickers permit hitting, identification or contribution claims would
314
00:20:02.759 --> 00:20:06.079
undermine that purpose. C Anderson three ninety seven f dot
315
00:20:06.119 --> 00:20:09.240
three d at five twenty three, reasoning the absence of
316
00:20:09.279 --> 00:20:14.039
contribution or identification to divide damages among co conspirators itself
317
00:20:14.079 --> 00:20:17.880
performs a deterrent function for would be violators, who must
318
00:20:18.000 --> 00:20:21.759
risk being the unlucky ones saddled with liability. Third, the
319
00:20:21.799 --> 00:20:26.240
tvpa's remedial scheme makes clear that Congress did not intend
320
00:20:26.240 --> 00:20:30.519
to include rights to contribution or idemnity. Courts of routinely
321
00:20:30.559 --> 00:20:34.359
cautioned against creating any federal common law rights of idemnity
322
00:20:34.480 --> 00:20:39.000
or contribution in areas where Congress is created comprehensive legislative
323
00:20:39.039 --> 00:20:43.440
remedies access for all incorporated versus. Trump International Hotel and
324
00:20:43.640 --> 00:20:47.599
Tower and Condo two thousand and seven WL sixty three
325
00:20:47.720 --> 00:20:51.559
thirty nine fifty one at seven SDN Y February twenty six,
326
00:20:51.759 --> 00:20:55.359
two thousand and seven Northwest Airlines four fifty one US
327
00:20:55.359 --> 00:20:58.799
at ninety three to ninety four. The TVPA presents such
328
00:20:58.799 --> 00:21:02.640
a comprehensive scheme. Along with criminal punishments, it provides for
329
00:21:02.759 --> 00:21:06.039
various civil causes of action, and the express provision for
330
00:21:06.119 --> 00:21:10.559
private enforcement in certain carefully defined circumstances. Strongly counsels against
331
00:21:10.640 --> 00:21:16.119
judiciously in grafting additional remedies Herman, one seventy two ft
332
00:21:16.200 --> 00:21:19.000
three d At one forty four. Indeed, it's not the
333
00:21:19.039 --> 00:21:21.920
court's place simply to alter the balance struck by Congress
334
00:21:21.920 --> 00:21:25.960
in determining how damages should be apportioned. Fourth, the relevant
335
00:21:26.039 --> 00:21:29.759
legislative history in the TVPA is silent on an idemnity
336
00:21:29.960 --> 00:21:33.400
and contribution, showing that Congress did not even contemplate, let
337
00:21:33.440 --> 00:21:37.519
alone intent for such rights. Without express language or even
338
00:21:37.559 --> 00:21:40.680
a hint of intent, the essential predicate for implication of
339
00:21:40.720 --> 00:21:44.240
a private remedy simply does not exist here. Further, it
340
00:21:44.279 --> 00:21:47.039
would be improper to craft such a remedy from federal
341
00:21:47.039 --> 00:21:50.920
common law. The situations in which such judicial legislating is
342
00:21:50.960 --> 00:21:54.319
welcome are few and restricted Texas Industrial for fifty one
343
00:21:54.440 --> 00:21:57.359
US at six forty, and they generally fall into one
344
00:21:57.359 --> 00:22:00.359
of two categories, one when a federal rule is nestssari
345
00:22:00.480 --> 00:22:04.119
to protect a uniquely federal interest, or two when Congress
346
00:22:04.160 --> 00:22:07.920
is given the court power to develop substantative law. Neither
347
00:22:07.960 --> 00:22:11.839
applies here. A defendant's right of recovery from another wrongdoer
348
00:22:12.079 --> 00:22:17.519
does not implicate any federal interest. Scalia versus Staffing Group LLC.
349
00:22:17.720 --> 00:22:20.119
Nine point fifty one Ft three D. Ten ninety seven
350
00:22:20.319 --> 00:22:23.279
eleven h five, Ninth Circuit, twenty twenty. And there's no
351
00:22:23.359 --> 00:22:25.960
indication that Congress has given the courts the power to
352
00:22:26.039 --> 00:22:29.880
develop substantative law in the area of sex trafficking enforcement,
353
00:22:29.960 --> 00:22:32.839
as it has an admiralty law, for example. Since there
354
00:22:32.880 --> 00:22:35.079
is no hint that Congress intended for there to be
355
00:22:35.160 --> 00:22:38.960
a right of contribution or identification under the TVPA, and
356
00:22:39.079 --> 00:22:41.680
this issue does not implicate a federal interest or area
357
00:22:41.720 --> 00:22:44.799
of law expressly left to the courts to develop, the
358
00:22:44.920 --> 00:22:48.200
Court should not imply such causes of action here. JP
359
00:22:48.319 --> 00:22:52.640
Morgan's claims for identification and contribution arising under the TVPA,
360
00:22:52.920 --> 00:22:55.599
which include all of the claims alleged in the USVI
361
00:22:56.119 --> 00:22:59.279
fac therefore fell. All right, we're going to wrap up
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this episode here and in the next episode we're going
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to pick up where we left off, and that's with
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parts c. JP Morgan's identification claim fails for additional reasons.
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If you'd like to contact me, you can do that
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00:23:10.599 --> 00:23:14.400
at bo B B Y c ap u Cci at
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00:23:14.440 --> 00:23:18.200
Protonmeil dot com. All of the other information that goes
368
00:23:18.200 --> 00:23:21.400
with the episode can be found in the description box.
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00:23:22.119 --> 00:23:25.519
What's up, everyone, and welcome back to the Epstein Chronicles.
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00:23:25.759 --> 00:23:27.920
In this episode, we're picking up where we left off
371
00:23:28.000 --> 00:23:32.720
with the jes Stay motion for dismissal See JP Morgan's
372
00:23:32.759 --> 00:23:37.240
identification claims fail for additional reasons. JP Morgan's claims for
373
00:23:37.279 --> 00:23:41.720
identification fails for three other reasons. One JP Morgan's contractual
374
00:23:41.759 --> 00:23:45.839
idemity of mister Staley precludes any claim for common law
375
00:23:46.000 --> 00:23:49.799
identification in favor of the bank. Two, both those in
376
00:23:49.920 --> 00:23:54.599
usvii's complaints allege that JP Morgan was directly not vicariously
377
00:23:54.680 --> 00:23:58.000
liable for the misconduct. And three JP Morgan fails to
378
00:23:58.079 --> 00:24:01.960
allege that the decisions as plaintiff's injuries were solely within
379
00:24:02.039 --> 00:24:07.039
mister Staley's province at the bank. I. Mister Staley's contractual
380
00:24:07.119 --> 00:24:11.880
idemnity precludes common law idemnity here Under black letter New
381
00:24:11.960 --> 00:24:15.400
York law, contractual identity between parties flowing only in one
382
00:24:15.400 --> 00:24:19.519
direction extinguishes common law idemnity flowing in the other direction.
383
00:24:20.000 --> 00:24:24.720
Serve sign Erector's Company versus Allied Outdoor Advertisement, Incorporated. Five
384
00:24:24.839 --> 00:24:29.200
seventy three Nys two D five thirteen five fourteen, First Apartment,
385
00:24:29.240 --> 00:24:33.920
nineteen ninety one. Within the subject of identification clearly contemplated
386
00:24:34.000 --> 00:24:38.079
and expressly addressed by contract. We hold that under these
387
00:24:38.079 --> 00:24:42.240
circumstances there could be a one way obligation to identify
388
00:24:42.400 --> 00:24:47.319
by the idemeter, and any reciprocal obligation is extinguished accord
389
00:24:47.440 --> 00:24:52.079
Lamela versus Verdicon Ltd. One twenty eight NYS three D
390
00:24:52.240 --> 00:24:56.440
ninety one, ninety four, Third Department, twenty twenty Honeywell Incorporated
391
00:24:56.519 --> 00:25:00.160
versus J. P. Maguire Company, nineteen ninety nine WL one
392
00:25:00.240 --> 00:25:04.480
zero two seven six two at six sdn Y, February
393
00:25:04.519 --> 00:25:08.480
twenty fourth, nineteen ninety nine. Here JP Morgan agreed to
394
00:25:08.519 --> 00:25:11.880
identify mister Staley as an officer and employee to the
395
00:25:11.880 --> 00:25:15.319
fullest extent permitted by law example a Section five oh
396
00:25:15.440 --> 00:25:19.000
one of two thousand and four by laws. These bylaws
397
00:25:19.039 --> 00:25:21.680
serve as a contract between the company and its officers.
398
00:25:21.920 --> 00:25:24.559
But nowhere in the by laws or otherwise did mister
399
00:25:24.599 --> 00:25:28.599
Staley agree to identify JP Morgan. Since the parties agreed
400
00:25:28.640 --> 00:25:32.079
that JP Morgan would identify mister Staley without a reciprocal
401
00:25:32.200 --> 00:25:35.599
right to identification for the bank, the common law identification
402
00:25:35.720 --> 00:25:40.880
claim benefiting JP Morgan is foreclosed. Two. JP Morgan fails
403
00:25:40.920 --> 00:25:44.400
to state a claim for identification because USVII and Doe
404
00:25:44.599 --> 00:25:48.839
seek the whole JP Morgan directly not vicariously liable. Even
405
00:25:48.880 --> 00:25:52.519
if common law identification were available, the claim still fails
406
00:25:52.559 --> 00:25:55.720
because the plaintiff's complain seek the whole the bank liable
407
00:25:55.759 --> 00:25:59.400
for its own actions, not as mister Staley's employer. Under
408
00:25:59.440 --> 00:26:02.759
New York line, a party cannot obtain common law identification
409
00:26:03.160 --> 00:26:06.200
unless it has been held to be vicariously liable without
410
00:26:06.240 --> 00:26:09.400
proof of any negligence on its own part. McCarthy versus
411
00:26:09.440 --> 00:26:14.279
Turner Construction Incorporated. Nine fifty three Northeast two d seven
412
00:26:14.400 --> 00:26:17.480
ninety four, eight oh one and Y twenty eleven. See
413
00:26:17.559 --> 00:26:20.599
Lamello one twenty eight n Ys three d at ninety four.
414
00:26:21.200 --> 00:26:24.720
Common Law identification is available only in favor of one
415
00:26:24.799 --> 00:26:28.200
who is held responsible solely by operation of law because
416
00:26:28.200 --> 00:26:32.240
of his or her relation to the actual wrongdoer. Emphasis added,
417
00:26:32.559 --> 00:26:36.160
Citations omitted Board of Managers of the one twenty five
418
00:26:36.240 --> 00:26:40.039
North tenth Condo Verse one twenty fifth North ten LLC.
419
00:26:40.200 --> 00:26:44.240
Fifty five Nys three d three seventy four, three seventy six,
420
00:26:44.559 --> 00:26:48.240
affirming dismissal of a claim for common law identification where
421
00:26:48.319 --> 00:26:53.599
party seeking idemnity liability was not purely vicarious. In other words,
422
00:26:53.680 --> 00:26:58.319
identification claims are not recognizable where the purported idemnities liability
423
00:26:58.359 --> 00:27:00.519
in the pending main action would be based on its
424
00:27:00.519 --> 00:27:04.160
own failures. Here, none of the plaintiffs' claim seek the
425
00:27:04.160 --> 00:27:07.519
whole JP Morgan liable solely because it employed mister Staley
426
00:27:07.759 --> 00:27:11.400
to the country. Both DOE and the USVII premise liability
427
00:27:11.480 --> 00:27:15.839
on JP Morgan's own alleged conduct. Underlying the outstanding common
428
00:27:15.880 --> 00:27:18.599
law on federal law claims is the allegation that JP
429
00:27:18.720 --> 00:27:22.200
Morgan provided financial services to Epstein and his associates and
430
00:27:22.240 --> 00:27:26.599
furtherance of their sex trafficking enterprise. These services included, for example,
431
00:27:26.720 --> 00:27:29.720
allowing Epstein to withdraw large sums of cash without question
432
00:27:30.240 --> 00:27:33.640
dough Fac. Three twenty six, three fifty four, seventy four.
433
00:27:34.119 --> 00:27:37.440
Though also alleges that JP Morgan failed to follow AML
434
00:27:37.640 --> 00:27:41.720
and anti structuring reporting requirements found in the Bank Secrecy
435
00:27:41.759 --> 00:27:44.519
Act and other laws. Felled the timely file with the
436
00:27:44.519 --> 00:27:48.759
federal government, though required SAARs that financial institutions must file
437
00:27:48.799 --> 00:27:51.480
with the FINSEN whenever there is suspected case of money
438
00:27:51.519 --> 00:27:54.599
laundering or fraud. And concealed from the federal government as
439
00:27:54.720 --> 00:28:00.440
numerous cash payments to co conspirators. The USVII makes similar allegationations.
440
00:28:01.079 --> 00:28:03.839
There is no allegation that this conduct by JP Morgan
441
00:28:03.920 --> 00:28:07.079
was undertaken solely by, or even known to, mister Staley.
442
00:28:07.359 --> 00:28:10.640
The bank is solely responsible for those acts. Nowhere is
443
00:28:10.680 --> 00:28:14.279
it alleged in either plaintiffs complaints or JP Morgan's third
444
00:28:14.279 --> 00:28:18.200
party complaints that mister Staley provided cash or participated in
445
00:28:18.279 --> 00:28:22.039
decision making on BSA compliance. In fact, it's not even
446
00:28:22.079 --> 00:28:25.599
alleged that mister Staley was aware of Epstein's cash withdrawals
447
00:28:25.720 --> 00:28:29.039
or at all involved in the compliance functions consideration of
448
00:28:29.079 --> 00:28:32.720
whether the Epstein transactions breached banking laws, and even if
449
00:28:32.759 --> 00:28:36.240
he did, those allegations regarding the bank's willful failure to
450
00:28:36.319 --> 00:28:40.680
follow regulations extends beyond twenty thirteen, when mister Staley was
451
00:28:40.680 --> 00:28:43.720
no longer working at the bank. Nor is it alleged
452
00:28:43.720 --> 00:28:47.279
that mister Staley had decision making authority for Epstein's accounts
453
00:28:47.480 --> 00:28:50.079
such that he helped decide whether to keep Epstein as
454
00:28:50.079 --> 00:28:52.920
a client. In short, it's clear on the face of
455
00:28:52.960 --> 00:28:55.359
these complaints that the bank is not being sued as
456
00:28:55.400 --> 00:28:59.240
mister Staley's employer, but rather because it allegedly provided Epstein
457
00:28:59.440 --> 00:29:02.319
with a financial tools and cover to maintain his sex
458
00:29:02.359 --> 00:29:07.000
trafficking ring. Three. JP Morgan's identification claim fails because JP
459
00:29:07.119 --> 00:29:11.359
Morgan's allegamistconduct was outside the scope of mister Staley's responsibilities.
460
00:29:11.880 --> 00:29:15.640
JP Morgan's claim for identification also fails because it seeks
461
00:29:15.640 --> 00:29:18.599
to hold mister Staley accountable for actions outside the scope
462
00:29:18.759 --> 00:29:22.200
of his responsibilities at the bank. Under the New York law,
463
00:29:22.240 --> 00:29:25.640
identification is actionable only where the injury was due solely
464
00:29:25.680 --> 00:29:29.480
to the proposed idemeter's negligent performance or non performance of
465
00:29:29.519 --> 00:29:33.240
an act solely within his province. Corley versus Country Squire
466
00:29:33.279 --> 00:29:37.799
Apartments Incorporated. Eighty Nys two d nine hundred, nine hundred,
467
00:29:37.880 --> 00:29:41.319
Second Department, two thousand and six. Barren versus Grant eight
468
00:29:41.400 --> 00:29:45.279
fifty two Nys three seventy four three seventy four, Second Department,
469
00:29:45.319 --> 00:29:48.960
two thousand and eight. The party seeking identification must have
470
00:29:49.039 --> 00:29:52.839
delegated exclusive responsibility for the duties given rise to the
471
00:29:52.920 --> 00:29:57.119
loss to the party from whom identification is sought. Here,
472
00:29:57.119 --> 00:29:59.799
both the USVII and though allege that they were in
473
00:30:00.160 --> 00:30:03.000
by JP Morgan's decision to retain Epstein as a client
474
00:30:03.279 --> 00:30:06.279
and to continue providing financial services that served as the
475
00:30:06.279 --> 00:30:10.279
lifeblood of his sex trafficking scheme. They likewise claim that
476
00:30:10.319 --> 00:30:13.319
they were injured by JP Morgan's refusal to follow federal
477
00:30:13.359 --> 00:30:17.079
banking regulations. JP Morgan is not pleaded that mister Staley
478
00:30:17.319 --> 00:30:21.119
had decision making authority over Epstein's accounts or the compliance department,
479
00:30:21.279 --> 00:30:23.720
let alone that these were solely within his province at
480
00:30:23.759 --> 00:30:27.880
the bank. JP Morgan concedes this, alleging that the conducted
481
00:30:27.960 --> 00:30:30.799
places at issue in the third party complaints were not
482
00:30:30.839 --> 00:30:35.680
in connection with the performance of mister Staley's duties for JPMC. Thus,
483
00:30:35.799 --> 00:30:40.240
JP Morgan is failed to adequately plead identification d. JP
484
00:30:40.359 --> 00:30:43.960
Morgan's contribution claim fells. To state a claim for contribution,
485
00:30:44.119 --> 00:30:46.960
JP Morgan must plead that one mister Staley breached the
486
00:30:47.039 --> 00:30:49.920
duty that he owed to either the plaintiffs or JP Morgan,
487
00:30:50.079 --> 00:30:53.359
two his breach caused an injury, and three the injury
488
00:30:53.440 --> 00:30:55.920
was the same injury for which JP Morgan is being
489
00:30:55.920 --> 00:31:00.160
held liable. Bellis versus Tokyomarne and Fire Insurance Company two
490
00:31:00.160 --> 00:31:03.039
thousand and two WL one nine three one four nine
491
00:31:03.319 --> 00:31:06.960
at seventeen sdn Y February seventh, two thousand and two
492
00:31:07.319 --> 00:31:11.680
CE ny CPLR Section fourteen oh one. JP Morgan fails
493
00:31:11.720 --> 00:31:15.160
to plead the elements one in three. First, JP Morgan
494
00:31:15.440 --> 00:31:17.960
has failed to properly plead that mister Staley breached the
495
00:31:18.039 --> 00:31:20.160
duty that he owed to either the plaintiffs or to
496
00:31:20.200 --> 00:31:23.240
the bank. Nowhere in the complaint is JP Morgan allege
497
00:31:23.400 --> 00:31:25.920
that mister Staley owed a duty to the USVII or
498
00:31:25.960 --> 00:31:28.799
to DOE. And while Staley may have voted a fiduciary
499
00:31:28.880 --> 00:31:32.640
duty to JP Morgan through their employee employer relationship, JP
500
00:31:32.759 --> 00:31:35.240
Morgan is felt to adequately plead that such a duty
501
00:31:35.319 --> 00:31:39.559
was breached, as explained further below. Second, JP Morgan has
502
00:31:39.599 --> 00:31:42.680
not adequately pleaded that mister Staley caused the same harm
503
00:31:42.720 --> 00:31:45.279
for which the bank has been sued. No right of
504
00:31:45.319 --> 00:31:48.759
contribution arises when the injuries allegedly caused by the party
505
00:31:48.920 --> 00:31:53.000
are separate and distinct. Nasaw Roofing and Sheet Metal Company
506
00:31:53.079 --> 00:31:57.079
versus Facilities Development Corporation five twenty three any dot two
507
00:31:57.160 --> 00:32:00.400
D eight three eight oh five n Y nineteen eight.
508
00:32:00.920 --> 00:32:03.680
Here JP Morgan has failed to plead the injuries for
509
00:32:03.720 --> 00:32:07.559
which it's seeking contribution. Instead, JP Morgan merely claims that,
510
00:32:07.599 --> 00:32:11.000
if Doe is successful on her claims, Staley's actions caused
511
00:32:11.079 --> 00:32:16.200
or substantially contributed to any resulting damages TPC fifty three.
512
00:32:16.240 --> 00:32:19.119
This terrest statement fails to state what harm mister Staley
513
00:32:19.160 --> 00:32:21.720
is being alleged to have caused. Perhaps this is no
514
00:32:21.839 --> 00:32:25.279
surprise because whatever injury the bank caused simply cannot be
515
00:32:25.319 --> 00:32:29.000
the same as to what mister Staley allegedly caused. The
516
00:32:29.079 --> 00:32:32.559
crux of the plaintiff's complaints is that JP Morgan provided
517
00:32:32.599 --> 00:32:36.279
the financial lifeblood of Epstein's sex trafficking ring by providing
518
00:32:36.319 --> 00:32:39.480
access to limitless cash and helping Epstein of a detection
519
00:32:39.680 --> 00:32:43.720
by ignoring banking regulations. JP Morgan fails to allege how
520
00:32:43.759 --> 00:32:47.039
mister Staley, alone bank employee who has no banking license
521
00:32:47.200 --> 00:32:50.319
and who is not alleged to have control over Epstein's
522
00:32:50.319 --> 00:32:53.640
accounts or formal compliance role, contributed to injuries that are
523
00:32:53.720 --> 00:32:58.119
uniquely caused by a financial institution. JP Morgan also alleges
524
00:32:58.160 --> 00:33:02.160
that mister Staley sexually assaulted OH. Even accepting this baseless
525
00:33:02.160 --> 00:33:05.640
allegation is true as is required, it does not provide
526
00:33:05.640 --> 00:33:09.519
a basis for JP Morgan to seek contribution. Those claims
527
00:33:09.799 --> 00:33:13.119
do not seek damages for battery. Instead, she seeks all
528
00:33:13.200 --> 00:33:17.359
damages arising from JP Morgan's financial support of Epstein's sex
529
00:33:17.400 --> 00:33:21.359
trafficking ring. Because JP Morgan has failed to adequately plead
530
00:33:21.400 --> 00:33:26.200
the requirements for contribution, this claim must be dismissed. E
531
00:33:26.519 --> 00:33:30.599
JP Morgan cannot receive contribution for punitive damages. Even if
532
00:33:30.599 --> 00:33:33.519
the court finds that the contribution claim should stand, it
533
00:33:33.559 --> 00:33:36.839
should strike JP Morgan's attempt to receive contribution for any
534
00:33:36.839 --> 00:33:41.279
potential punitive damages awarded to Doe or the USVII. JP
535
00:33:41.400 --> 00:33:44.880
Morgan seeks contribution for all damages awarded to Doe and
536
00:33:44.960 --> 00:33:48.680
the USVII, who in turn both seek punitive damages. But
537
00:33:48.839 --> 00:33:51.759
because punitive damages are in the nature of a penalty,
538
00:33:51.960 --> 00:33:55.720
contribution among toward feesers for these damages is not permissible.
539
00:33:55.960 --> 00:33:59.559
Felice versus del Porti, five twenty four Nys two d Nine,
540
00:33:59.640 --> 00:34:03.519
nineteen nine to twenty fourth, Department, nineteen eighty eight. All right,
541
00:34:03.519 --> 00:34:05.119
we're going to wrap up right here, and in the
542
00:34:05.119 --> 00:34:08.320
next episode we're gonna pick up with section two. Because
543
00:34:08.360 --> 00:34:11.760
the idemnity and contribution claims fail, the employment claim should
544
00:34:11.760 --> 00:34:15.400
be dismissed for non compliance with Rule fourteen. All of
545
00:34:15.400 --> 00:34:18.039
the information that goes with this episode can be found
546
00:34:18.280 --> 00:34:21.239
in the description box. What's up everyone, and welcome back
547
00:34:21.239 --> 00:34:24.519
to the Epstein Chronicles. In this episode, we're picking up
548
00:34:24.639 --> 00:34:27.039
or we left off with the just daily motion to
549
00:34:27.159 --> 00:34:31.679
dismiss two. Because the idemnity and contribution claims fail, the
550
00:34:31.719 --> 00:34:35.440
employment claims should be dismissed for non compliance with Rule fourteen.
551
00:34:35.880 --> 00:34:38.840
Count three breach of fiduciary duty and Count four a
552
00:34:38.920 --> 00:34:41.840
violation of the faithless servant doctrine do not belong in
553
00:34:41.880 --> 00:34:44.800
this case. If those two employment claims are the only
554
00:34:44.840 --> 00:34:48.280
claims remaining, the court should dismiss them without prejudice under
555
00:34:48.320 --> 00:34:51.599
Rule fourteen A. Rule fourteen A permits a party to
556
00:34:51.719 --> 00:34:55.159
inplead another who is or may be liable to the
557
00:34:55.159 --> 00:34:58.159
third party plaintiff for all or part of the plaintiff's
558
00:34:58.159 --> 00:35:02.480
claims against the third party plaintiff fed rcivp. Fourteen A one.
559
00:35:02.960 --> 00:35:06.800
This standard is not a mirror technicality, as impleter under
560
00:35:06.840 --> 00:35:11.360
Rule fourteen A is narrowly construed. The Media Beauty Investment
561
00:35:11.360 --> 00:35:16.880
Partners LLC, First Media Tribeca LLC twenty fifteen WL seven
562
00:35:16.960 --> 00:35:20.400
zero seven eight six four one at three SDN Y,
563
00:35:20.519 --> 00:35:24.679
November twelfth, twenty fifteen. A third party claim satisfies Rule
564
00:35:24.679 --> 00:35:28.039
fourteen A only when the third party's liability is somehow
565
00:35:28.039 --> 00:35:30.679
dependent on the outcome of the main action, or when
566
00:35:30.719 --> 00:35:34.320
the third party is secondarily liable to the defendant. Zohar
567
00:35:34.480 --> 00:35:38.519
CDO two thousand and three, Dash One Ltd. Versus Patriarch
568
00:35:38.559 --> 00:35:42.679
Partners Llc. Two eighty six f supp three D six
569
00:35:42.840 --> 00:35:47.760
thirty four six fifty six, SDN Y, twenty seventeen. Unlike
570
00:35:47.800 --> 00:35:51.400
for supplemental jurisdiction under US Code twenty eight, Section thirteen
571
00:35:51.480 --> 00:35:55.559
sixty seven, or for analyzing a discretionary motion to several claims,
572
00:35:55.800 --> 00:35:58.639
the mere fact that the alleged third party claim arises
573
00:35:58.679 --> 00:36:01.159
from the same transaction or set of facts as the
574
00:36:01.199 --> 00:36:05.039
original claim is not enough. State National Insurance Company versus
575
00:36:05.079 --> 00:36:09.000
Certain Interested Underwriters at Lloyd's London, twenty twenty two, w
576
00:36:09.239 --> 00:36:12.639
L four five four seven four four four at two
577
00:36:13.039 --> 00:36:16.920
SDN Y, September twenty ninth, twenty twenty two, only if
578
00:36:16.960 --> 00:36:20.159
in pleater is proper with at least one predicate claim,
579
00:36:20.280 --> 00:36:23.000
that is one dependent on the outcome of the main action.
580
00:36:23.360 --> 00:36:26.719
Can the third party plaintiff join non dependent claims see
581
00:36:26.719 --> 00:36:30.559
Fedar civ p. Eighteen A. Here, the employment claims are
582
00:36:30.559 --> 00:36:33.960
properly joined under rule eighteen A only if mister Staley
583
00:36:34.039 --> 00:36:37.280
first is properly impleted based on a third party claim
584
00:36:37.559 --> 00:36:41.000
that satisfies Rule fourteen A. If the court dismisses the
585
00:36:41.000 --> 00:36:44.960
contribution and idemnity claims, then in plead of the independent
586
00:36:45.000 --> 00:36:48.920
employment claim is improper. Neither employment claims depend on the
587
00:36:48.960 --> 00:36:52.559
outcome of the plaintiff's claims against JP Morgan Zohar two
588
00:36:52.599 --> 00:36:56.199
eighty six f Dot supp. Three d at six fifty six.
589
00:36:56.920 --> 00:37:01.360
While JP Morgan relies on Dose and us svii's allegations
590
00:37:01.559 --> 00:37:04.440
as the basis for the purported breach of fuduciary duty,
591
00:37:04.599 --> 00:37:07.679
that alone is not sufficient in theory. JP Morgan could
592
00:37:07.760 --> 00:37:11.199
prevail entirely in the main actions and evade any liability,
593
00:37:11.360 --> 00:37:14.280
yet still prevail against mister Staley on the employment claims
594
00:37:14.480 --> 00:37:18.280
and secure disgorgement of his salary or compensatory damages and
595
00:37:18.280 --> 00:37:21.760
dependent of what it could have owed the plaintiffs. Whereas
596
00:37:21.800 --> 00:37:24.679
the crucial characteristic of a Rule fourteen claim is a
597
00:37:24.719 --> 00:37:28.039
defendant trying to transfer the third party defendant the liability
598
00:37:28.039 --> 00:37:32.320
asserted against Tim by the original plaintiff. The employment claims
599
00:37:32.320 --> 00:37:35.199
here are the type that JP. Morgan could have asserted
600
00:37:35.239 --> 00:37:39.239
in an independent action Zohar two eighty six f supp
601
00:37:39.400 --> 00:37:43.199
Three d At six, fifty six and fifty seven. Accordingly,
602
00:37:43.400 --> 00:37:47.119
if is argued above, the identification in contribution claim fails,
603
00:37:47.280 --> 00:37:51.559
the employment claims cannot stand. Three the employment claims fell
604
00:37:51.639 --> 00:37:55.079
on the merits. The employment claims are also subject to
605
00:37:55.119 --> 00:37:59.360
dismissal under Rule twelve B six A. The employment claims
606
00:37:59.360 --> 00:38:02.760
are time barred. Although the statute of limitations is ordinarily
607
00:38:02.880 --> 00:38:05.599
an affirmative defense that must be raised in the answer,
608
00:38:05.880 --> 00:38:08.840
a statute of limitations defense may be decided on a
609
00:38:08.960 --> 00:38:11.960
Rule twelve B six motion if the defense appears on
610
00:38:12.000 --> 00:38:15.000
the face of the complaint a Lule versus Congregation of
611
00:38:15.039 --> 00:38:18.800
Christian Brothers seven seventy four Ft. Three d. Seven ninety one,
612
00:38:19.079 --> 00:38:22.960
seven ninety eight and Dot twelve, Second Circuit twenty fifteen.
613
00:38:23.400 --> 00:38:26.239
Such is the case here. In New York. The limitations
614
00:38:26.280 --> 00:38:29.800
period for breach of fiduciary duty claims generally depends on
615
00:38:29.960 --> 00:38:34.440
the substantative remedy that the plaintiff seeks ALP Incorporated versus
616
00:38:34.440 --> 00:38:39.039
Moskowitz one sixty seven Nys three d forty five fifty two,
617
00:38:39.360 --> 00:38:42.119
First Apartment, twenty twenty two. There is only a three
618
00:38:42.199 --> 00:38:45.880
year limitations period when, as here, the remedy sought is
619
00:38:45.960 --> 00:38:49.679
purely monetary. JP Morgan may argue that a six year
620
00:38:49.719 --> 00:38:53.159
limitations period applies, claiming that the case should be covered
621
00:38:53.199 --> 00:38:56.400
by the longer limitations period for actions by a corporation
622
00:38:56.719 --> 00:39:00.480
against their directors and officers n y cplaw Our Section
623
00:39:00.519 --> 00:39:05.639
two thirteen, at seven. See Levy versus Young Adult Institution Incorporated.
624
00:39:05.719 --> 00:39:09.440
One O three f Dot supp three d four twenty six,
625
00:39:09.719 --> 00:39:13.719
four thirty four and thirty five SDNY twenty fifteen. The
626
00:39:13.760 --> 00:39:16.760
claim is time barred either way. Mister Staley left JP
627
00:39:16.880 --> 00:39:21.480
Morgan in early twenty thirteen, which was when his fiduciary
628
00:39:21.559 --> 00:39:24.159
duty and duty of loyalty to the company ended, and
629
00:39:24.199 --> 00:39:27.039
which is thus the most recent date the claim could arise.
630
00:39:27.880 --> 00:39:31.440
JP Morgan, however, waited over ten years to file these claims.
631
00:39:31.719 --> 00:39:35.079
Its suit falls well outside even the six year statute
632
00:39:35.079 --> 00:39:38.360
of limitations, so the court should dismiss these claims to
633
00:39:38.440 --> 00:39:41.519
be sure for an action based upon fraud the discovery
634
00:39:41.679 --> 00:39:45.000
a cruel rule extends the limitations period to the greater
635
00:39:45.119 --> 00:39:47.559
of six years or two years from the time the
636
00:39:47.559 --> 00:39:50.719
plaintiff or the person under whom the plaintiff claims discovered
637
00:39:50.719 --> 00:39:54.320
the fraud or could with reasonable diligence have discovered it
638
00:39:54.519 --> 00:39:58.840
and why CPLR Section two thirteen eight. Because JP Morgan's
639
00:39:58.880 --> 00:40:02.440
employment claims sound and fraud see Infra Page twenty and
640
00:40:02.480 --> 00:40:05.559
twenty one. JP Morgan bears the burden to a plead
641
00:40:05.599 --> 00:40:08.320
and establish that the fraud could not have been discovered
642
00:40:08.360 --> 00:40:11.079
prior to the two year period before the commencement of
643
00:40:11.119 --> 00:40:16.159
the action. Canariato verse Canariato, twenty four nys Dot three
644
00:40:16.239 --> 00:40:20.719
d two fourteen to sixteen, Second Department, twenty sixteen, noting
645
00:40:20.719 --> 00:40:23.679
burden rests with the plaintiff to raise sufficient factual issue
646
00:40:23.760 --> 00:40:26.400
and that the issue can be resolved at pleading stage.
647
00:40:26.719 --> 00:40:30.079
Despite that burden, JP Morgan has pleaded zero facts as
648
00:40:30.159 --> 00:40:32.920
to why it could not have discovered the alleged claims
649
00:40:32.960 --> 00:40:35.440
before the past two years. What is more, there is
650
00:40:35.480 --> 00:40:38.519
a duty to inquire. A plaintiff cannot claim ignorance of
651
00:40:38.519 --> 00:40:41.760
an alleged fraud when the facts call for investigation a
652
00:40:41.880 --> 00:40:45.960
Zora Bank Ltd. Versus Deutsche Bank twenty nine NYS three
653
00:40:46.039 --> 00:40:50.559
d ten fourteen, First Department, twenty sixteen. In other pleadings
654
00:40:50.559 --> 00:40:53.880
in this case, JP Morgan Herald's a bombshell Miami Herald
655
00:40:53.960 --> 00:40:57.039
story from November twenty eighteen that blew the lid open
656
00:40:57.119 --> 00:41:01.880
in exposed shocking details about Epstein's decade long operation. JP
657
00:41:02.000 --> 00:41:05.039
Morgan motioned to dismiss do complaint at one and two
658
00:41:05.239 --> 00:41:08.480
and in February twenty twenty two years after JP Morgan
659
00:41:08.519 --> 00:41:12.119
concedes that it learned of Epstein's misconduct through the article.
660
00:41:12.440 --> 00:41:16.159
Media outlets reported that mister Staley was under investigation by
661
00:41:16.159 --> 00:41:20.639
the UK's Financial Conduct Authority for his connection to Epstein. Surely,
662
00:41:20.679 --> 00:41:24.760
the Bombshell article, Epstein's subsequent arrest in twenty nineteen, and
663
00:41:24.800 --> 00:41:28.039
the public investigation into mister Staley put JP Morgan on
664
00:41:28.159 --> 00:41:30.960
notice of at least the duty to inquire into its
665
00:41:31.000 --> 00:41:35.880
own dealings with Epstein, including mister Staley's alleged involvement. After all,
666
00:41:36.000 --> 00:41:39.199
numerous JP Morgan employees knew that mister Staley had a
667
00:41:39.239 --> 00:41:42.079
relationship with Epstein, and the bank had access to mister
668
00:41:42.119 --> 00:41:46.119
Staley's communications from this tenure that JP Morgan now alleges
669
00:41:46.199 --> 00:41:50.360
reflect that relationship as pleaded. The complaint provides no explanation
670
00:41:50.599 --> 00:41:53.840
for why JP Morgan sat on its putative claims. The
671
00:41:53.880 --> 00:41:56.920
Court should dismiss the employment claims which concern a job
672
00:41:57.000 --> 00:42:00.000
mister Staley left more than a decade ago as time
673
00:42:00.119 --> 00:42:05.519
barred B. The employment claims are improperly pleaded untimeliness. Aside
674
00:42:05.639 --> 00:42:09.159
JP Morgan fails to properly plead the employment claims. As
675
00:42:09.199 --> 00:42:12.000
an initial matter, both claims must meet the heightened pleading
676
00:42:12.000 --> 00:42:15.320
standard of Rule mind B. The standard applies to not
677
00:42:15.360 --> 00:42:18.360
only the cause of action stylized as fraud claims, but
678
00:42:18.519 --> 00:42:22.320
also those in which the gravamen of the claim relies
679
00:42:22.480 --> 00:42:26.280
on dishonest conduct. Rombach versus Chong three point fifty five
680
00:42:26.400 --> 00:42:29.159
Ft three D one sixty four one seventy one and
681
00:42:29.239 --> 00:42:32.599
seventy two Second Circuit, two thousand and four. Courts have
682
00:42:32.639 --> 00:42:35.400
found non fraud claims to sound and fraud where the
683
00:42:35.559 --> 00:42:39.480
underlying conduct alleged has been fraud or closely linked with
684
00:42:39.559 --> 00:42:42.599
fraudulent behavior, such as claims that the other party is
685
00:42:42.599 --> 00:42:47.880
attempted to induce action through misrepresentation or material emissions. This
686
00:42:47.960 --> 00:42:51.679
can include claims for breach of fiduciary duty. Here counts
687
00:42:51.800 --> 00:42:54.760
three to four sound and fraud both rely on the
688
00:42:54.760 --> 00:42:59.320
same alleged underlying conduct, namely that mister Staley supposedly subverted
689
00:42:59.360 --> 00:43:01.960
the interests of his employer, JP Morgan, to which he
690
00:43:02.039 --> 00:43:04.960
owed a duty of good faith and loyalty for support.
691
00:43:05.039 --> 00:43:09.239
JP Morgan practically trips over itself alleging varied deception by
692
00:43:09.280 --> 00:43:12.199
mister Staley. It alleges that he deceived it about a
693
00:43:12.199 --> 00:43:16.800
material conflict of interest, fraudulently concealed his misconducts, secretly acted
694
00:43:17.039 --> 00:43:20.719
against the interests of the bank, repeatedly providing misleading information,
695
00:43:21.079 --> 00:43:25.880
affirmatively misrepresented facts, and consistently and misleadingly vouch for Epstein.
696
00:43:26.400 --> 00:43:30.039
These claims, which rely on allegedly fraudulent statements and conduct,
697
00:43:30.239 --> 00:43:34.039
are precisely the kind that trigger Rule B nine scrutiny eg.
698
00:43:34.599 --> 00:43:38.880
Rubio versus BSD Management, Incorporated, twenty twenty one w L
699
00:43:39.800 --> 00:43:43.679
ten twenty six fifty one at four sdn Y applying
700
00:43:43.760 --> 00:43:47.800
Rule nine B to counterclaim for violation of faithless servant doctrine,
701
00:43:48.119 --> 00:43:53.320
because the gravimen of the claim was Plaintiff's alleged fraudulent misrepresentations. Cf.
702
00:43:53.440 --> 00:43:56.280
Levy one oh three f Dot supp Three d At
703
00:43:56.280 --> 00:43:59.679
four forty seven, finding Rule nine B not triggered where
704
00:43:59.719 --> 00:44:02.599
Breech whch claim did not allege that Levy tricked the
705
00:44:02.719 --> 00:44:06.480
organization into taking action it would not have otherwise taken.
706
00:44:06.599 --> 00:44:09.480
Having level claims of fraud, JP Morgan must plead with
707
00:44:09.559 --> 00:44:14.440
particularity when and how mister Staley allegedly deceive the bank I.
708
00:44:14.719 --> 00:44:17.280
JP Morgan fails to state a claim for breach of
709
00:44:17.320 --> 00:44:20.800
fiduciary duty. JP Morgan fails to meet its burden and
710
00:44:20.880 --> 00:44:24.159
plead a viable breach of fiduciary duty claim. Under New
711
00:44:24.239 --> 00:44:27.079
York law, a plaintiff must allege one the existence of
712
00:44:27.119 --> 00:44:31.519
a fiduciary relationship, two misconduct by the defendant, and three
713
00:44:31.599 --> 00:44:36.639
damages directly caused by the defendant's misconduct Yucus cap sorrel
714
00:44:36.800 --> 00:44:40.119
Verse Feldmann, nine seventy seven Ft three D two sixteen
715
00:44:40.440 --> 00:44:44.719
two forty one, Second Circuit twenty twenty. The complaint falls
716
00:44:44.840 --> 00:44:49.039
far short. First, while sweeping, the actual allegations of misconduct
717
00:44:49.079 --> 00:44:52.599
are conclusiony and fatally vague, especially in the face of
718
00:44:52.679 --> 00:44:55.760
Rule nine B. When how and from whom did mister
719
00:44:55.800 --> 00:45:00.199
Staley fraudulently conceal facts and observations about Epstein. When now
720
00:45:00.239 --> 00:45:04.840
into whom did mister Staley affirmatively misrepresent Epstein's activities or
721
00:45:04.880 --> 00:45:09.480
provide misleading information on Epstein's character and conduct. The complaint
722
00:45:09.719 --> 00:45:12.320
leaves the parties in the court guessing as to the
723
00:45:12.320 --> 00:45:15.440
critical who, what, when, where, and how of the alleged
724
00:45:15.440 --> 00:45:19.519
fraud underlying this claim Kester twenty three f. Supp. Three
725
00:45:19.599 --> 00:45:23.159
d at two fifty two. Such cursory pleading violates Rule
726
00:45:23.280 --> 00:45:27.519
nine B and merits the claim's dismissal. Babbitt twenty twenty
727
00:45:27.639 --> 00:45:30.119
w L three one eight eight nine five at five.
728
00:45:30.800 --> 00:45:33.880
Nor does JP Morgan properly plead that mister Staley had
729
00:45:33.960 --> 00:45:36.840
any duty to report to the bank information about Epstein
730
00:45:37.000 --> 00:45:40.159
or their alleged relationship. An agent like mister Staley is
731
00:45:40.199 --> 00:45:43.559
obligated to disclose only information that is relevant to the
732
00:45:43.559 --> 00:45:46.679
affairs of the agency entrusted to them, not every fact
733
00:45:46.679 --> 00:45:52.039
on every topic. Polar Versus Bioscript Incorporated. Nine seventy four FT. Supp.
734
00:45:52.480 --> 00:45:56.480
Two D two four two twenty seven, sdn Y twenty thirteen.
735
00:45:56.920 --> 00:46:01.840
See also Neurological surgery PC first mL MIIC Insurance Company
736
00:46:01.880 --> 00:46:05.440
one seventy five NYS three D two sixty six two
737
00:46:05.519 --> 00:46:09.039
sixty nine, second Department, twenty twenty two. A cause of
738
00:46:09.079 --> 00:46:13.280
action alleging fraudulent omission or concealment of material information requires
739
00:46:13.320 --> 00:46:16.199
an allegation that the defendant had a duty to disclose
740
00:46:16.199 --> 00:46:19.800
that information. Since JP Morgan has nowhere alleged that mister
741
00:46:19.840 --> 00:46:24.159
Staley had any official responsibilities regarding the Epstein accounts, mister
742
00:46:24.199 --> 00:46:27.719
staley purported failure to disclose information to the bank about
743
00:46:27.719 --> 00:46:32.199
Epstein does not give rise to breach of his fiduciary duty. Second,
744
00:46:32.199 --> 00:46:35.719
the complaint fails to properly plead damages directly caused by
745
00:46:35.719 --> 00:46:39.639
the defendant's misconduct. For a breach of fiduciary claim, JP
746
00:46:39.760 --> 00:46:42.679
Morgan must plead both that it suffered damages and that
747
00:46:42.719 --> 00:46:46.320
the alleged misrepresentations or other misconduct were the direct and
748
00:46:46.320 --> 00:46:49.599
approximate cause of the losses claimed, not merely a butt
749
00:46:49.639 --> 00:46:55.639
for cause. Tobia versus United Group of Cost Insurance twenty
750
00:46:55.719 --> 00:46:58.679
sixteen w L five four one seven eight two four
751
00:46:58.719 --> 00:47:01.800
at twenty two and the n Y September twenty second,
752
00:47:02.039 --> 00:47:06.280
twenty sixteen dismissing breach of fiduciary duty claim for failure
753
00:47:06.320 --> 00:47:10.519
to allege damages directly caused by defendant's conducts. According to
754
00:47:10.599 --> 00:47:14.440
Lamb versus Fisel seven forty five Nys two d five
755
00:47:14.559 --> 00:47:17.400
thirty four, five thirty six and thirty seven, First Apartment,
756
00:47:17.519 --> 00:47:20.880
two thousand and two, JP Morgan notably does not plead
757
00:47:20.960 --> 00:47:24.159
that as of this date it has actually lost any
758
00:47:24.239 --> 00:47:27.559
money from mister Staley is alleged deception. Indeed, Doe and
759
00:47:27.679 --> 00:47:31.719
USVII assert that JP Morgan financially benefited by earning millions
760
00:47:31.760 --> 00:47:36.559
of dollars through its connection to Epstein, including from interest commissions, fees,
761
00:47:36.559 --> 00:47:40.880
and other financial benefits do fac two sixty seven and
762
00:47:40.920 --> 00:47:44.199
sixty eight. The only damages that JP Morgan points to
763
00:47:44.679 --> 00:47:48.079
four count three are one costs in defending and adverse
764
00:47:48.079 --> 00:47:51.719
publicity from these lawsuits, and two any amounts in damages
765
00:47:51.760 --> 00:47:54.639
that JP Morgan might have to pay the plaintiffs, But
766
00:47:54.760 --> 00:47:59.039
in neither form of alleged damages suffices. Mister Staley did
767
00:47:59.039 --> 00:48:03.360
not directly cause the litigation initiated by independent plaintiffs some
768
00:48:03.480 --> 00:48:06.239
ten years after he left the company, nor any of
769
00:48:06.239 --> 00:48:10.800
the associated publicity. Indeed, many of the allegations in USVII,
770
00:48:10.920 --> 00:48:15.000
and those complaints are completely unrelated to mister Staley's conduct. Similarly,
771
00:48:15.119 --> 00:48:18.199
any secondhand damages that JP Morgan might have to pay
772
00:48:18.239 --> 00:48:22.800
the plaintiffs are completely remote and speculative and thus improperly pleaded.
773
00:48:23.239 --> 00:48:29.199
CEGC Trade Maritime Corporation versus Counts Dutanis seven forty four
774
00:48:29.480 --> 00:48:32.440
f Appendix seven twenty one through seven twenty five and
775
00:48:32.519 --> 00:48:35.519
twenty six, noting that in order to succeed on breach
776
00:48:35.559 --> 00:48:40.239
of fiduciary duty claim, plaintiffs must prove nonspeculative damages, and
777
00:48:40.280 --> 00:48:43.320
that the claim is not enforceable until damages are sustained.
778
00:48:43.639 --> 00:48:46.280
Given JP Morgan's clear of failure to point to any
779
00:48:46.320 --> 00:48:51.000
speculative damages that it has incurred through mister Staley's purported disloyalty,
780
00:48:51.239 --> 00:48:53.519
it is failed to properly plead a cause of action
781
00:48:53.840 --> 00:48:58.159
for breach of fiduciary duty, and this claim must be dismissed. Two.
782
00:48:58.400 --> 00:49:00.960
JP Morgan fails to state a claim under the faithless
783
00:49:01.000 --> 00:49:05.079
servant doctrine. Count For's claims that mister Staley violated the
784
00:49:05.079 --> 00:49:08.920
faithless servant doctrine fails for similar reasons. New York courts
785
00:49:08.920 --> 00:49:12.159
are far from clearer regarding the contours of and interplay
786
00:49:12.199 --> 00:49:15.239
between a claim for breach of fiduciary duty and the
787
00:49:15.239 --> 00:49:18.760
faithless servant doctrine Feldman, nine seventy seven f. Dot three
788
00:49:18.800 --> 00:49:21.480
d at two forty two, and some courts treat the
789
00:49:21.559 --> 00:49:24.840
cause of action as merely an alternate form of recovery
790
00:49:24.880 --> 00:49:28.400
for a breach of fiduciary duty claim. But under the doctrine,
791
00:49:28.599 --> 00:49:30.880
one who owes a duty of loyalty to an employer
792
00:49:31.119 --> 00:49:34.079
but it's faithless in the performance may be liable to
793
00:49:34.119 --> 00:49:39.559
forfeit his compensation. Fouling Serve versus Anderson Weinroths and Company Lp.
794
00:49:39.719 --> 00:49:42.639
Three forty four F. Dot three D one eighty four,
795
00:49:43.000 --> 00:49:46.119
two hundred Second Circuit two thousand and three. Courts apply
796
00:49:46.199 --> 00:49:50.360
alternate standards to decide whether an employee's conduct merits disgorgement
797
00:49:50.719 --> 00:49:54.199
see Rubio twenty twenty one w L one O. Two
798
00:49:54.239 --> 00:49:57.639
six fifty one at four. One standard requires that the
799
00:49:57.639 --> 00:50:02.039
misconduct and unfaithfulness substantially violate the contract of service, while
800
00:50:02.079 --> 00:50:05.440
another requires that an agent acted versely to his employer
801
00:50:05.679 --> 00:50:08.320
in any part of a transaction, or omit to disclose
802
00:50:08.360 --> 00:50:11.599
any interest which would naturally influence his conduct. In dealing
803
00:50:11.639 --> 00:50:14.880
with the subject of his employment. But however, the standard
804
00:50:14.920 --> 00:50:17.920
is stated. New York courts have applied the faithless servant
805
00:50:17.920 --> 00:50:21.199
doctrine only in the limited circumstances where the employee is
806
00:50:21.239 --> 00:50:25.199
acted directly against the employer's interests, as an embezzlement, in
807
00:50:25.280 --> 00:50:29.280
properly competing with the current employer, or usurping business opportunities.
808
00:50:29.880 --> 00:50:34.400
Ebel versus Geomedia Incorporated, twenty twenty one, w L two
809
00:50:34.519 --> 00:50:38.119
zero three seven eight sixty seven at seven Skeny, May
810
00:50:38.159 --> 00:50:42.280
twenty first, twenty twenty one. Along with lacking particularity for
811
00:50:42.320 --> 00:50:44.880
the same reasons as Count three, Count four does not
812
00:50:44.960 --> 00:50:49.440
remotely allege such circumstances. The complaint here repeat stock phrases
813
00:50:49.639 --> 00:50:53.199
such as mister Staley acted as a faithless servant, abandoned
814
00:50:53.239 --> 00:50:56.360
the interests of JP Morgan, and violated the JP Morgan
815
00:50:56.400 --> 00:50:59.199
Code of Conduct in a way that permeated his service,
816
00:51:00.000 --> 00:51:03.000
but it lacks factual allegations that match the claim. There
817
00:51:03.039 --> 00:51:07.079
are no allegations that mister Staley embezzled, competed against JP Morgan,
818
00:51:07.239 --> 00:51:10.719
you serve business opportunities, or undertook any of the activity
819
00:51:10.719 --> 00:51:12.800
that would put him in financial odds with the bank
820
00:51:13.440 --> 00:51:16.639
closest JP Morgan gets is alleging that mister Staley lied
821
00:51:16.639 --> 00:51:19.400
to keep Epstein as a lucrative client for the bank,
822
00:51:19.719 --> 00:51:23.519
but misconduct, which is only an incremental profit from increasing
823
00:51:23.559 --> 00:51:26.079
the amount of referred business to the employer, is not
824
00:51:26.239 --> 00:51:30.480
actionable under the very narrow faithless servant doctrine. Miller versus
825
00:51:30.559 --> 00:51:35.119
Levi and Kerensky LLP. Twenty twenty one, w L five
826
00:51:35.280 --> 00:51:39.119
three five five nine nine at six, SDN Y, February twelfth,
827
00:51:39.159 --> 00:51:43.239
twenty twenty one, dismissing claim against lawyer who acted unfaithfully
828
00:51:43.239 --> 00:51:45.920
to benefit other law firms and a mentor of hers
829
00:51:46.000 --> 00:51:49.440
outside of her firm, when the only financial benefit derived
830
00:51:49.440 --> 00:51:52.480
from actions that profited her firm as well. While JP
831
00:51:52.639 --> 00:51:56.159
Morgan does not allege in subordination and dishonesty, it fell
832
00:51:56.239 --> 00:51:59.719
still allege any element of self dealing on mister Staley's part,
833
00:52:00.119 --> 00:52:03.880
so the claim is not actionable under the faithless servant doctrine.
834
00:52:04.239 --> 00:52:08.079
Gruel versus Cuneo, twenty sixteen, w L three zero eight
835
00:52:08.280 --> 00:52:11.840
eight zero three at eight, SDN Y, January twenty fifth,
836
00:52:11.880 --> 00:52:16.840
twenty sixteen. The Court should therefore dismiss count number four conclusion.
837
00:52:17.119 --> 00:52:20.400
For the foregoing reasons, mister Staley respectfully requests that the
838
00:52:20.440 --> 00:52:24.840
Court dismissed the complaint respectfully submitted Brendan Sullivan, Junior, and
839
00:52:24.920 --> 00:52:29.039
this was dated April twenty fourth, twenty twenty three. All
840
00:52:29.079 --> 00:52:31.800
of the information that goes with this episode can be
841
00:52:31.840 --> 00:52:33.599
found in the description box